Monday, November 28, 2011

Paul Krugman talks about the importance of perception in looking at the economy (something this blog appreciates). Krugman talks about this in terms of deregulation, and I can see where he sees the continued support for deregulation as affected by who is doing well, considering the financial meltdown we just experienced (the continued support for deregulation in the alternate selective fact Republican/conservative universe). But I think the specific numbers in the table in his column - from 1947 to 1973 versus from 1979 to 2007 - say a lot more about the top tax bracket than about deregulation per se. Which, to me, explains Republican's desperation to make the Bush tax cuts permanent; their insistence, for example, that the top 1% are "job creators". Of course, those job creators are making more money than they ever have, but unless they see they can continue to make that money (without fear of additional taxation), then they will continue to not hire new workers.

Just a couple of random but connected thoughts, Glenn Greenwald frequently points out the evil that Obama is doing (drone attacks, civil liberties). Ironically, no conservative seems to quote Greenwald, since Bush did as much evil, and any of the current crop of Republican candidates (with the possible bizarre exception of Ron Paul) would also cheerfully do the evil Obama is doing and more. What Republicans do accuse Obama of (spending wildly) is in turn neatly disproven by Paul Krugman. I suppose we can’t have that actually respect the constitution and try to help the poor. Even Jimmy Carter, the nearest we have come perhaps to that ideal, ever, wasn’t really Jimmy Carter

Sunday, November 27, 2011

I don't like to say that any particular current trend in politics is something we have never seen before in history. The current animosity and therefore paralysis in Congress, for example, is at least matched if not exceeded by the tensions before the Civil War. The power of the wealthy is something we saw before in the late eighteen hundreds, a running battle all the way up to 1929. On the other hand, I would agree that TV, the internet and even smartphones have had new impacts on politics, at least in my opinion.

The Occupy Wall Street folks want to claim they are something new under the sun. Of course, there was the Bonus Army and Hoovervilles between the Wars. But OWS's interesting approach to political demands is somewhat different.

One way I wouldn't characterize it is with the class card as Jack Kelly does: "Who'da thunk a protest movement composed largely of ignorant and arrogant rich kids with no coherent agenda who deliberately disrupt the lives of working people, urinate and defecate in public, steal from street vendors and assault old ladies and little children would become unpopular?"

Kelly has been alternating between defenses of Republican candidates, attacks on government support of higher education and this week's topic, attacks on OWS and the Occupy movement. Kelly's contempt is well symbolized by this paragraph, the central theme of this week's column: "So when Republican presidential candidate Newt Gingrich said OWS protesters should "go get a job right after you take a bath," he was offering sound advice. But cable news anchors took umbrage."

When I repeated Newt's quote to a friend, she commented that the point was that the protesters can't get a job, and many can't even take a bath. In my opinion, the view of the Occupy movements Kelly wants to portray is of recent college graduates who have moved their kegger downtown, and are simply going wild, stealing food and pretending to be 60's type hippies.

That's easy for a comfortable newspaper columnist who apparently answers not to an editor but rather to the Tea Party to say. But I think that we need to take a closer, more logical look if we want to understand what is really happening.

I mean, we all know that in the last forty years there have been huge increases in productivity due in part to huge increases in technology. We should all also know that middle class (and below)'s wages have not increased by very much over that same time period, sometimes barely keeping up with inflation. These are numbers easily verifiable on the internet. We are the only industrial nation that did not have universal health care/insurance, and even the recent measure passed is in danger of being repealed before it can be implemented. And it was largely the financial sector of our nation that simultaneously caused hundred of millions of Americans to suddenly lose half or more of the value of their homes and/or have their mortgages double or so in cost and for hundreds of thousands of Americans to be foreclosed on, and to set of a worldwide recession where the GNP's of almost all countries went negative for a few quarters, and we still haven't recovered from. Now we have nine percent unemployment (much higher for people with less education) and a President who first tried to find bipartisan solutions with opponents who still call him a socialist and say no to everything.

The first recent US populist protest movement that responded to at least some of these issues, the Tea Party, almost immediately became a tool of conservatives and the super rich. So (for example) despite the fact Tea Partiers themselves often do not have health care or jobs, they rail against the Affordable Care Act and stimulus spending, and concentrate their focus on reducing spending to reduce debt (a strategy that consistently backfires around the world). Some American's have embraced the Tea Party as representing their concerns, but for many the fact the Tea Party obviously wants to control the Republican Party makes clear how little the Tea Party cares for poor people.

Given that is where we found ourselves, it is not surprising (at least to me) that some few ordinary people might take to the streets and literally camp out on the doorstep of corporate America. I think the political naivety claimed by the Occupy movement may be somewhat overstated for some if not many of its members, but I think I get that its concerns have been expressed in terms that ordinary people would understand.

Addressing Kelly's seemingly main charge, that the Occupy movement in general is a magnet for crime, is somewhat complicated. Kelly starts his column with allegations about human waste at Occupy Santa Cruz and OWS; the Santa Cruz allegations are at least credibly disputed. And Kelly's allegations about arrest numbers bear thinking about. These are protests, after all, and protesters do things to attract the attention of the media, which often attracts the attention of the police By the Googling "Occupy Wall Street murders" brought up one account in Oakland of a murder "near" the occupy camp. By that logic, a murder in downtown Pittsburgh could be pinned on Luke Ravenstahl as much as anyone.

Personally, I think that Jack Kelly's contemptuous dismissal of the Occupy Movement does nothing to help PG readers understand things, although it does advance the Republican/Tea Party/conservative's agenda. You may disagree, but how long can we claim the debt is more important than both the recession and the huge income inequity?

Sunday, November 20, 2011

Paul Krugman was on ABC's "This Week" (with Christiane Aman-purr - a Colbert joke), so I watched that "This Week". The round table conversation started with a discussion of what Rahm Emmanuel said about the Republican candidates in a previous interview. Peggy Noonen, before Krugman even got a comment in, started with a statement that this showed us what the Democratic strategy is, this is going to be a demolition derby on the part of the Democrats, in which they simply try to tear the other guy down (I paraphrase).

Excuse me, what have the Republicans been doing since mid summer of 2008, and every day since?

Personally, I think Noonen's comment is fairly typical, especially when some pundit or reporter shows a hint of fairness and talks about Republican intransigence on economics or science.

Today Jack Kelly doubles down on what apparently is his new anti-college stance. He complains that students don’t take the right classes, and apparently that they dare to go to college at all. He suggests that a third of students shouldn’t even be in college.

Kelly starts by repeating a story from “The very left-wing Nation magazine” about some guy who gets a masters in puppetry (apparently leaving his job to do so), then can’t return to his job as teacher because of budget cutbacks. Would he have lost his job in those same budget cutbacks if he hadn’t got the masters? Maybe, maybe not, and certainly Kelly doesn’t and maybe can’t tell us. Does he even care about the whole truth?

And stepping back, even as Kelly gives us lots of numbers, maybe we can give him a few as well. When I googled around the internet, I found plenty of confirmation for Kelly’s statement that about 45 percent of students who start college drop out. But in the PG I found a 2008 article that stated “60 percent of respondents reporting a "B" average or higher when they left school”. I have to wonder if that 60 percent number might be higher now as the great recession drags on.

By the way, something else Kelly doesn’t tell us is that the average unemployment rate for people with BA’s is 4.5 percent. The rate for people with some college is higher, I am not sure quite what, but the rate for people who (might take Kelly's advice and) never go to college is somewhere around 9 to 10 percent. For people of color with only a high school degree or who dropped out of high school, we start to see the unemployment rates of 12, 15, maybe 20 percent. And I suspect those rates are not going to come down much when the recession ends. In other words, how many students had to leave school because family money ran out because of parental unemployment.

I find it interesting that Kelly identifies “business” as the most popular major, and promptly slams as not very bright the students who choose it. He only mentions engineering once as a superior choice to business or education. He does spend two paragraphs heaping scorn on education majors, essentially calling them the stupidest of college students.

I have to say that there probably is something to Kelly's complaint about the lack of engineers in schools, and (though he doesn't bother to mention) the lack of chemists, physicists, biologists, mathematicians and so on. I sympathize with those who are intimidated by science and particularly math. I was certainly intimidated by math in high school, but even more important to me was my passion for political theory, which in turn led me to economics (and a couple of calculus classes). I wish that there might be more outreach, especially to groups that are stereotypically considered not to have technical skills such as African Americans and women. Kelly doesn't address this, although he does identify gender and ethnic studies specifically as college majors to eliminate, and thus areas of study at all. Kelly strongly implies that women and African Americans are the people who should not be in college as all.

Yet, I have to question whether Kelly is even serious about the lukewarm endorsement he makes of sciences as better majors for students. After all, both Republicans and especially the Tea Party have strong anti-science credentials. Does Kelly want more Americans who look at evolution versus creationism through the prism of science? Does he want more Americans who consider Climate Change in terms of what science academies say? And what jobs will there be for civil engineers or University researchers in the sciences if the Republicans take power?

No, all the advice Kelly gives is oriented toward students not going to college. Mike Rowe of Discovery Channel's "Dirty Jobs" is campaigning for "skilled labor" jobs which do not necessarily require college degrees. They may only require trade school educations, or even some sort of apprenticeship. I think this is a great thing, although I think students need to look carefully even at trade schools, which can cost fifteen thousand or forty thousand dollars for degrees to be a cook or auto mechanic.

The cost of higher education is a big issue that costs across party lines. But Jack Kelly does the readers of the PG a disservice by presenting the issue in ideological terms. Apparently the Tea Party wants less educated Americans, easier to lead astray.

Tuesday, November 15, 2011

Several times I wondered (on at least other blogs, if not this one) what the endgame for Occupy Wall Street might be. Perhaps today we found out, when Mayor Bloomberg had them evicted (at 1:00 am, to avoid a public disturbance). Apparently there were (entirely predictable) incidents of excessive force, including forcibly keeping the press away from Zucotti Park (some were arrested).

But many others have commented on that, so I won't address that. What I did want to say was to wonder if maybe this was the/a plan. Of course, having a plan implies there were people coordinating OWS. Human microphones, funny hand gestures and consensus needed for decisions? Kind of makes some sort of puppet masters seem less likely.

Regardless, perhaps the OWS protestors sort of lucked out, in the sense of having been handed (forcibly) an out. Mind you, as of this moment as I understand it, the OWS protestors do not have access to their own possessions (including soggy clothes, tents and expensive computers and generators). Also, many of them are unemployed and perhaps homeless because of it. But to some extent the movement may now be able to claim to have been victimized by the one percent (to which group Michael Bloomberg surely belongs) and the OWS protestors and now to some extent martyrs.

I have to say I hope that this incident does not come to dominate the discussion. The current huge income inequity in the US is a topic worth discussing. Reasonable discussion may yield answers acceptable to all (yeah, hoping for reasonable discussion between Republicans and Democrats may be a bit much) instead of more painful, poorly executed policies.

Sunday, November 13, 2011

I found this column really interesting. I don't know what Adam Davidson's politics are, and maybe they shouldn't matter for an economic analysis (although they often do seem to matter.) But Davidson repeats the annoying Republican/conservative straw man argument that taxing the rich at one hundred percent would not raise enough money to close the deficit (over what period of time? One year? Ten years? They never say.) Davidson also argues, somewhat more convincingly, that corporate taxes are too high, although he goes on to say that indeed many big corporations pay zero taxes with loopholes, and essentially says that there is no way to remove those loopholes. Davidson finishes by asserting that taxes on the middle class most be dramatically raised to close the deficit.

Look, my personal opinion is that taxing anyone's income over 50% is too onerous, and currently I want to see the top tax bracket at 40%, no more but no less. Do I think that will close the deficit? No, almost certainly not. But I think that it would a good symbol, the rich setting aside greed for patriotism. Meanwhile, I think for at least a year no other personal income taxes should be raised. After all, part of the problem with the economy is a lack of demand for goods and services.

I am not sure about corporate taxes, lowering them and removing various loopholes seems like a good idea. But a lot of tax loopholes have some logic behind them. The problem is I have little faith Congress is currently capable of make smart, good choices about removing some, but not all, corporate tax loopholes. As galling as it is, it strikes me that big corporations will still pay zero corporate taxes for some time to come.

As I understand it, our economic situation has not really changed since January 2009. Apparently US treasury bonds are selling briskly, even though the effective interest rate is negative (we are sort of making money of selling bonds.) Because of that, there could be another, larger stimulus to jump start the economy. After the economy recovers, we can have a national debate about the debt. Now, it is reasonable to say the the debt and deficit are larger physically than they ever have been before, so they should be addressed sometime (and by the way, big parts of the deficit right now is unemployment benefits and reduced tax revenues cause by the high unemployment rate.) But again raising taxes on the middle class and/or the poor will hurt that demand thing, and possibly push us into a double dip recession. And the deficit/debt are not an excuse to act as though teachers, police or whole government departments are somehow leaches on society. If you want to say the poor need some "skin" in the game (because social security, Medicare, state and local taxes don't count,) then I want to talk about whether the rich are patriotic or just greedy.

In any event, I think that this Sunday NY Times article is nothing more than a restatement of Republican talking points disguised as "thoughtful" commentary, and a major disservice to the Times' readers.

In Jack Kelly's column today, he raises (once again) the notion of (liberal) media hypocrisy, then proceeds to attack the women who accused Herman Cain of sexual harassment/assault with his own fairly slimy innuendo.

Let me say upfront, I don't know if Herman Cain sexually harassed or even sexually assaulted any women. We probably won't know for months. And the fact that the National Restaurant Association settled out of court with two women for "five figures" makes me think they wanted to avoid a trial, but also that the women themselves did not think they would win a trial (and the NRA also thought that) and both sides just wanted this to be done easily. Doesn't mean it didn't happen, but it does mean that either there were no witnesses or witnesses that were that impressed.

That said, it is disturbing that apparently four women have accused Cain of harassment or assault. One or two accusers could be "gold diggers" (as Kelly quotes an "anonymous" New York Post source), but four, who likely didn't know about each other (one or two might have).

Bill Clinton gave us plenty of clear signs that he was a womanizer (although not to my knowledge a harasser). Voters, after twelve years of Republican Presidents, decided to elect Clinton anyway (kind of puts Reagan in perspective, doesn't it). I have to say that unless for all four accusers it can be proven beyond a doubt that Cain is entirely innocent, that I suspect a majority of voters would reject him. Although it is possible that if a majority of Republican voters can get past their racism concerning Cain (putting their nih ... black man against the Democrat's nih ... black man), then they might be able to forgive him some minor sexual issues. Hell, it might make them more comfortable, since it would like confirm their stereotypes about black men. A Cain/Gingrich campaign could work like the Bush/Cheney campaign worked (Republicans might also embrace a Cain/Perry candidacy, but not, I suspect, a majority of American voters).

Of course even Kelly says (at the end of his column) "There are many reasons for not supporting Herman Cain for president.", and I agree. Cain's s embracing of his status as a Washington outsider comes pretty close to contempt for various reasonably popular ideas such as lower taxes for the poor ("God must love the poor, he made so many of them"). Since I am not a Republican and unlikely to become one soon, I don't really care about the Pennsylvania Republican primary whenever next year. So I am content to wait and see if anything more develops with the accusations. I suspect something will come of them, although probably nothing legal. But we will see if they are the cannon ball that sinks Cain's candidacy, or if it is something else.

Meanwhile, Kelly's defending Cain in light of what happened at Penn State strikes me as rather inappropriate.

Sunday, November 06, 2011

I have to tell you, I agree with some of what Jack Kelly says today. He is complaining about the cost of higher education today and student loan debt (how very 99% of him). But predictably he misplaces at least some of the blame, and finds wrong villains.

In fact Kelly's first sentence displays his odd perception of things: "The biggest consumer ripoff in America today -- and the next economic bubble to burst -- is higher education." I don't know that higher ed is actually the biggest consumer ripoff, but I think by any reasonable measure it has gotten too expensive in the last twenty years (even as it as been opened to many new groups of students). And the next bubble to burst? Well, if Republicans somehow eliminated the student loan program, that would drive many colleges and Universities into bankruptcy, but that would not be so much the bubble bursting as the floor being knocked out beneath the schools. But I am getting ahead of myself.

So as I said, I am in agreement that higher ed schools have gotten too expensive. I have to agree that one of the culprits has to be student loans, what grants there were and are, along with the tuition and fees tax deduction and/or the various education tax credits available. Clearly schools used the availability of these things to jack up their prices. Most all the Sophomores, Juniors and Seniors would not want to leave, even for a ten percent tuition increase, and incoming students would likely face the same tuition increases at all the schools they were looking at.

And I, like Kelly, would blame the government's assistance to students for the price increases. This is the same sort of example of the law of unintended consequences as what happened to American health care since World War II. In the case of health care, health insurance companies would pay what doctors and hospitals charged (because the patient must need it, right?). So doctors and hospitals started jacking up the prices and numbers of procedures need for adequate and thorough care (almost all of them simultaneously). When health insurance companies started only paying 805 of charges, that was an incentive to raise the price higher still. And of course health insurance companies had their own non profit "excess revenue" motive. And here we are.

Back to higher ed, student loans were at first a god send, in allowing students to bet against their future earnings as a college/university graduate. And mostly that has worked out well, at least until now. I keep repeating that college graduates are faring much better in this recession than high school graduates or high school dropouts (4.55 unemployment versus 10% or more).

Of course, that number says nothing about how college graduates are employed, or about whether recent graduates (the last few years) are finding jobs. Kelly says something about how 60% of the increase in the number of college graduates since 1992 work in low skill jobs; a figure I doubt anyone could actually derive with any confidence. Kelly also gives us numbers of food servers with college degrees, without saying how many total food servers there are. But I certainly think that this recession has forced college graduates to work in lower skill jobs, so I don't really care about Kelly's numbers.

Except to say that it strikes me Kelly is suggesting there should be fewer college graduates. Obviously some sort of restriction in aid to students would hit the poorest students first and hardest. Which is apparently Kelly's intention.

Kelly also complains that students don't learn enough, that some drop out and then he goes on to blame professors for both the tuition hikes and the failure of students. I will say that I agree somewhat that higher ed standards for what students have to take might well could be tightened. I think we can all agree that K-12 education could stand some reform as well, although I would probably approach it differently than Kelly (I would think identifying successful teachers and trying to disseminate their styles would help, Kelly would close the public education system, fire all the teachers and make K-12 something you would have to pay for). I will say I have little sympathy for those who drop out of college, especially now. But I would say Kelly is almost entirely wrong about the role of professors in this situation.

College professors do not detirmine their own salaries in all but the rarest situations. And they certainly do not detirmine the cost of tuition (yes, their salary affects the cost of tuition, see previous sentence). For that Kelly (and us) should look at college/university presidents or chancellors and their provosts. They are the people who make tuition recommendations to the boards of trustees. I think Kelly is right, schools did use the additional federal aid to raise (some) professors and particularly top administrators salaries and to increase bureaucracies (although not so much in the last ten years). But again blaming professors for that is ignoring who actually made the decisions.

Which brings us to Kelly's concluding points. He suggests that Obama will make things worse: "College tuition can't keep rising twice as fast as family income, but President Barack Obama wants to keep the scam going a little longer. He's proposed a student loan forgiveness program, with taxpayers eating the difference. It would save students about $8 a month, but the kids are too innumerate to figure that out."

Leaving aside the unnecessary snarks ("scam"? "innumerate" from the man who doesn't understand economics?), the plan is already out there, Obama just wants to accelerate forgiveness part. It apparently saves some students a bit more than $8, and might mean the difference between living their lives or going bankrupt.

A more interesting question is whether anything reasonable can be done about the increase in the cost of tuition. I fear that is something that we will not be able to address until we emerge from this recession. Which, if the Republicans continue to have their way, will not be for a long, long time.

Saturday, November 05, 2011

Besides commenting on Jack Kelly, I often enjoy making observations about what I see on Bill Maher's "Real Time". Maher has for a long time invited a mix of liberals and conservatives on his various talk shows, which I have to respect. Sometimes the discussions are sophisticated, just as or more often they are fairly superficial, but at least the Republican talking points are aired in a forum where they will be challenged. Maher himself started out as a libertarian to at least some degree, I think in part because libertarians come closest to providing a philosophical justification to his idea that marijuana should be legal (an idea I think most economists would support). Maher seems to have moved almost entirely to the left, perhaps because of the way thing have gone in the country in the last eleven years. If Al Gore had been elected, I can see where Maher might well be on the right.

So last night Bill Maher had a typical guest list, including Beau Biden (Joe's son, now the Delaware attorney general who is suing some Delaware based corporations for the Wall Street misdeeds), Darrel Issa (Republican Representative from California) and David Patterson (former New York Governor, Democrat). Those who were seated around the same table all got along and mostly laughed at Maher and each other. Maher also had Bill Engvall, the comedian, on. I like Engvall, think his work is funny. He turned out to be a fair bit more conservative than I might have thought he would be. He even confessed to liking the way Herman Cain talks, and thus having some affection for him as a candidate.

Of course Democrats are accustomed to mocking Herman Cain (as Bill Maher was doing last night). Those strongly interested in politics (like myself) are also horrified by Cain, who seems to take pride in not knowing what he is talking about (uz beki beki stan stan?). I notice that while Rush Limbaughm, Ann Coulter and much of Fox News are fans of Herman, Karl Rove and some of the Fox people who have interviewed him are not. Perhaps that is because Herman Cain is folksy to the level of being incoherent, not the best situation for making decisions and speaking on behalf of the country.

But I understand, most Americans do not pay attention to politics, and also don't vote. If they follows the national news at all, it is all about sports, music, movies ... or the Kardashians. Of people who do vote, most couldn't tell you the name of more than one or two of the people on the ballot, much less what their positions are on most if not all the issues. Most American have formed their political beliefs (to the extent they have any) through watching "Mr Smith Goes to Washington" (older Americans) and/or "Dave" (younger Americans) or perhaps "The Distinguished Gentleman". Admittedly there was a time when West Wing was among the most popular shows on TV, but that was short lived. Most of like and to some extent buy into the notion that if an ordinary, decent person got into politics, they could solve our problems using common sense.

That was what Bill Engvall hinted at on Maher's show. He outright said that he thought a business man would make a good President. Of course, this shows a lack of understanding of a) the role money is playing now in politics and the resulting power the rich have and b) the level of complexity involved in both the theoretical and practical aspects of being President. If you can't understand Keynesian economics you can't argue for it, but also if you don't understand that complicated arguments are hard to sell, you won't be able to tailor pitching the idea to us.

So I can see the appeal of Herman Cain, even or especially to the almost entirely white Tea Party (which often proves pretty racist in their views of issues concerning Obama). Cain plays into the myth of an everyman fighting for decency in Washington, and being attacked by the bad guys with a trumped up charge. Normally a charge of sexual harassment would kill the chances of the supposedly decent man, but the Republican base has moved past the charges straight to the the discovery that the evil opposition is behind them (either the Democrats or Rick Perry or both), and made it all up. That is, of course, pure Hollywood in playing on our shared narrative of how what seems like fiction turns out to be true if you have enough information (everybody loves a good conspiracy).

I think Herman Cain still has a good chance to be the nominee. Look how far Bill Clinton went. As for becoming President, I will paraphrase Miracle Max from the Princess Bride "It'd take a miracle".